Industrial Models, Inc. v. Snf, Inc.
17-1172
Fed. Cir.Nov 7, 2017Background
- Industrial Models entered the market selling fiberglass truck utility bodies using molds it purchased; SNF (later assigning IP to BFX entities) sent cease-and-desist letters claiming trade dress, patent, and copyright infringement and filed a Texas state-court trade dress suit.
- The Texas default judgment in SNF’s favor was reversed on appeal; SNF sold the relevant assets and IP to BFX Holdings/BFX, but SNF, BFX, and BFX Holdings continued coordinated litigation positions and refused covenants not to sue.
- Industrial Models then sued in federal court for declaratory judgment of noninfringement (trade dress, patent, copyright) and asserted antitrust and tortious-interference claims based on SNF’s pre-litigation threats and the Texas suit.
- The district court dismissed the antitrust and tortious-interference counts under Rule 12(b)(6) (Noerr-Pennington immunity / sham-litigation analysis), denied leave to amend, granted summary judgment to Industrial Models on trade dress noninfringement, and awarded attorneys’ fees; SNF entities appealed and the Fifth Circuit transferred the case to the Federal Circuit.
- The Federal Circuit (1) affirmed dismissal of antitrust/tortious-interference counts, (2) affirmed subject-matter jurisdiction and trade-dress summary judgment for Industrial Models, (3) affirmed denial of leave to amend, (4) vacated any attorney-fee award to the extent awarded under patent or copyright authorities and remanded to limit/recalculate fees under the Lanham Act only, and (5) denied Industrial Models’ request for appellate sanctions.
Issues
| Issue | Plaintiff's Argument (Industrial Models) | Defendant's Argument (SNF entities) | Held |
|---|---|---|---|
| Federal-circuit jurisdiction/transfer plausibility under §1338(a) | Federal jurisdiction exists because Industrial Models’ declaratory claims raise patent questions and SNF threatened patent suit | Transfer by Fifth Circuit was plausible; SNF’s later assignment doesn’t negate the threatened patent claims | Transfer plausible; Federal Circuit has jurisdiction under §1295(a)(1) because claim arises under patent law |
| Article III / Declaratory Judgment Act—case-or-controversy | Industrial Models had a real controversy: cease-and-desist letters, prior suit, refusal to covenant not to sue, and business preparations | SNF argues assignment of IP to BFX could defeat controversy | Court held a substantial controversy existed (MedImmune standard) given threats, litigation, participation, and refusal to covenant |
| Antitrust and tortious-interference claims—Noerr-Pennington and sham litigation exception | Alleged litigation threats, bad-faith Texas suit, invitations to collude, and actions causing Industrial Models to suspend production support sham-litigation antitrust claims | SNF argued its actions were petitioning/attendant litigation activity protected by Noerr-Pennington; not objectively baseless or repetitively baseless | Held Noerr-Pennington bars the antitrust and tort claims; Industrial Models failed to plead objectively baseless or sham litigation plausibly |
| Attorneys’ fees award (patent, copyright, trade dress) | Fees appropriate because case was exceptional and SNF’s positions lacked merit across IP claims | SNF argued its defenses on patent/copyright were nonfrivolous; only trade-dress litigation was weak | Court affirmed fee award only under the Lanham Act; vacated fee awards to extent based on patent or copyright and remanded to clarify/calculate fees under 15 U.S.C. § 1117(a) only |
Key Cases Cited
- Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (1988) (transferor court’s subject-matter-jurisdiction determination should be upheld if plausible)
- MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007) (clarifies the declaratory-judgment case-or-controversy inquiry)
- Prof’l Real Estate Inv’rs, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (1993) (defines sham litigation exception to Noerr-Pennington: objectively baseless and subjectively an attempt to use process as anticompetitive weapon)
- Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205 (2000) (product-design trade dress must be nonfunctional and show distinctiveness for protection)
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014) (defines standard for awarding attorney fees in exceptional patent cases; applied to Lanham Act fees)
- Aetna Life Ins. Co. v. Haworth, 300 U.S. 227 (1937) (foundational case on declaratory-judgment justiciability)